U.S. diplomats have reportedly called on Tokyo authorities to increase pressure on Japanese crypto exchanges and miners to sever ties with Russia. The request was made in an effort to deepen Moscow’s financial isolation amid Russia’s ongoing aggression against Ukraine.
Washington has called on Japanese crypto firms to cut ties and further isolate Russia
The U.S. is asking Japan to put more pressure on cryptocurrency exchanges and mining companies that continue to work with Russians. The U.S. wants Japanese entities to end their business relationships with Russia, thus furthering their financial isolation from the rest of the world.
The demands made by U.S. diplomats target some of the more than 30 licensed Japanese crypto trading platforms that still exist in the Russian Federation, the Financial Times revealed in an article Friday, citing people familiar with the matter.
U.S. representatives have told Tokyo to focus on shutting down crypto mining operations in Siberia’s Irkutsk Oblast with Japanese participation, two knowledgeable sources said. The region is known as Russia’s mining capital because it offers cheap hydropower and a cool climate.
Another unidentified person, who is also involved with the three exchanges, told Business Daily that Japan’s Financial Services Agency (FSA) responded by renewing its request for coin trading platforms to sever all remaining ties with Russia.
The FSA declined to comment to the Journal; in mid-March, the regulator asked the exchanges it oversees to monitor accounts and transactions involving the transfer of assets of individuals or entities placed under sanctions.
The agency did not explicitly tell firms to shut down their Russia-related operations, but some have already stopped working there. For example, crypto exchange Decurret said it decided to cease its activities in Russia after being notified by the FSA.
A former executive at another exchange confirmed that the Japanese exchange is facing intensified pressure to move any mining or back-office operations out of Russia. However, one person, who chose to remain anonymous, told the newspaper that he knows of at least one exchange that has maintained its Russian operations by establishing a shell company in Singapore to divert all payments.
The U.S. request comes on the heels of changes to Japan’s Foreign Exchange and Foreign Trade Law introduced to cover cryptocurrencies and other digital assets. The amendments are aimed at strengthening Tokyo’s authority to restrict the flow of digital currencies into and out of the country.
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